C. ENABLING REGULATION AND GENERAL BLOCK …

1 C. ENABLING REGULATION AND GENERAL BLOCK EXEMPTION REGULATION ENOfficial Journal of the European Communities14. 5. 98L 142/1I(Acts whose publication is obligatory)COUNCIL REGULATION (EC) No 994/98of 7 May 1998on the application of Articles 92 and 93 of the Treaty establishing the EuropeanCommunity to certain categories of horizontal State aidTHE COUNCIL OF THE EUROPEAN UNION,Having regard to the Treaty establishing the EuropeanCommunity, and in particular Article 94 thereof,Having regard to the proposal from the Commission (1),After consulting the European Parliament (2),Having regard to the opinion of the Economic and SocialCommittee (3),(1)Whereas, pursuant to Article 94 of the Treaty, theCouncil may make any appropriate regulations forthe application of Articles 92 and 93 and may, inparticular, determine the conditions in whichArticle 93(3) shall apply and the categories of aidexempted from this procedure;(2)Whereas, under the Treaty, the assessment ofcompatibility of aid with the common marketessentially rests with the Commission;(3)Whereas the proper functioning of the internalmarket requires strict and efficient application ofthe rules of competition with regard to State aids.

2 (4)Whereas the Commission has applied Articles 92and 93 of the Treaty in numerous decisions andhas also stated its policy in a number of communi-cations; whereas, in the light of the Commission'sconsiderable experience in applying Articles 92and 93 of the Treaty and the GENERAL texts issued bythe Commission on the basis of those provisions, itis appropriate, with a view to ensuring efficientsupervisionandsimplifyingadmini stration,without weakening Commission monitoring, thatthe Commission should be enabled to declare bymeans of regulations , in areas where the Commis-sion has sufficient experience to define generalcompatibility criteria, that certain categories of aidare compatible with the common market pursuantto one or more of the provisions of Article 92(2)and (3)

3 Of the Treaty and are exempted from theprocedure provided for in Article 93(3) thereof;(5)Whereas group exemption regulations will increasetransparency and legal certainty; whereas they canbe directly applied by national courts, withoutprejudice to Articles 5 and 177 of the Treaty;(6)Whereas it is appropriate that the Commission,when it adopts regulations exempting categories ofaid from the obligation to notify provided for inArticle 93(3) of the Treaty, specifies the purpose ofthe aid, the categories of beneficiaries and thresh-olds limiting the exempted aid, the conditionsgoverning the cumulation of aid and the conditionsof monitoring, in order to ensure the compatibilitywith the common market of aid covered by thisRegulation.

4 (7)Whereas it is appropriate to enable the Commis-sion, when it adopts regulations exempting certaincategories of aid from the obligation to notify inArticle 93(3) of the Treaty, to attach further detailedconditions in order to ensure the compatibilitywith the common market of aid covered by thisRegulation;(8)Whereas it may be useful to set thresholds of otherappropriate conditions requiring the notification ofawards of aid in order to allow the Commission to(1) OJ C 262, 28. 8. 1997, p. 6.(2) OJ C 138, 4. 5. 1998.(3) OJ C 129, 27. 4. 1998, p. Journal of the European Communities14. 5. 98L 142/2examine individually the effect of certain aid oncompetition and trade between Member States andits compatibility with the common market;(9)Whereas the Commission, having regard to thedevelopment and the functioning of the commonmarket, should be enabled to establish by means ofa REGULATION that certain aid does not fullfil all thecriteria of Article 92(1) of the Treaty and is there-fore exempted from the notification procedure laiddown in Article 93(3), provided that aid granted tothe same undertaking over a given period of timedoes not exceed a certain fixed amount.

5 (10)Whereas in accordance with Article 93(1) of theTreaty the Commission is under an obligation, incooperation with Member States, to keep underconstant review all systems of existing aid; whereasfor this purpose and in order to ensure the largestpossible degree of transparency and adequatecontrol it is desirable that the Commission ensuresthe establishment of a reliable system of recordingand storing information about the application ofthe regulations it adopts, to which all MemberStates have access, and that it receives all necessaryinformation from the Member States on the imple-mentation of aid exempted from notification tofulfil this obligation, which may be examined andevaluated with the Member States within theAdvisory Committee.

6 Whereas for this purpose it isalso desirable that the Commission may requiresuch information to be supplied as is necessary toensure the efficiency of such review;(11)Whereas the control of the granting of aid involvesfactual, legal and economic issues of a verycomplex nature and great variety in a constantlyevolving environment; whereas the Commissionshould therefore regularly review the categories ofaid which should be exempted from notification;whereas the Commission should be able to repealor amend regulations it has adopted pursuant tothis REGULATION where circumstances have changedwith respect to any important element whichconstituted grounds for their adoption or where theprogressive development or the functioning of thecommon market so requires;(12)Whereas the Commission, in close and constantliaison with the Member States, should be able todefine precisely the scope of these regulations andthe conditions attached to them.

7 Whereas, in orderto provide for cooperation between the Commis-sion and the competent authorities of the MemberStates, it is appropriate to set up an advisorycommittee on State aid to be consulted before theCommission adopts regulations pursuant to thisRegulation,HAS ADOPTED THIS REGULATION :Article 1 Group Commission may, by means of regulationsadopted in accordance with the procedures laid down inArticle 8 of this REGULATION and in accordance withArticle 92 of the Treaty, declare that the following categ-ories of aid should be compatible with the commonmarket and shall not be subject to the notificationrequirements of Article 93(3) of the Treaty:(a) aid in favour of:(i) small and medium-sized enterprises;(ii) research and development;(iii) environmental protection;(iv) employment and training;(b) aid that complies with the map approved by theCommission for each Member State for the grant ofregional regulations referred to in paragraph 1 shallspecify for each category of aid:(a) the purpose of the aid;(b) the categories of beneficiaries;(c) thresholds expressed either in terms of aid intensitiesin relation to a set of eligible costs or in terms ofmaximum aid amounts;(d) the conditions governing the cumulation of aid.

8 (e) the conditions of monitoring as specified in Article addition, the regulations referred to in paragraph1 may, in particular:(a) set thresholds or other conditions for the notificationof awards of individual aid;(b) exclude certain sectors from their scope;(c) attach further conditions for the compatibility of aidexempted under such 2De Commission may, by means of a Regulationadopted in accordance with the procedure laid down inArticle 8 of this REGULATION , decide that, having regard tothe development and functioning of the common market,certain aids do not meet all the criteria of Article 92(1)and that they are therefore exempted from the notifica-tion procedure provided for in Article 93(3), provided thataid granted to the same undertaking over a given periodof time does not exceed a certain fixed Journal of the European Communities14.

9 5. 98L 142 the Commission's request, Member States shall, atany time, communicate to it any additional informationrelating to aid exempted under paragraph 3 Transparency and adopting regulations pursuant to Article 1, theCommission shall impose detailed rules upon MemberStates to ensure transparency and monitoring of the aidexempted from notification in accordance with thoseregulations. Such rules shall consist, in particular, of therequirements laid down in paragraphs 2, 3 and implementation of aid systems or individual aidsgranted outside any system, which have been exemptedpursuant to such regulations , Member States shall forwardto the Commission, with a view to publication in theOfficial Journal of the European Communities,sum-maries of the information regarding such systems of aidor such individual aids as are not covered by exemptedaid States shall record and compile all theinformation regarding the application of the groupexemptions.

10 If the Commission has information whichleads it to doubt that an exemption REGULATION is beingapplied properly, the Member States shall forward to itany information it considers necessary to assess whetheran aid complies with that least once a year, Member States shall supply theCommission with a report on the application of groupexemptions, in accordance with the Commission'sspecific requirements, preferably in computerised Commission shall make access to those reports avail-able to all the Member States. The Advisory Committeereferred to in Article 7 shall examine and evaluate thosereports once a 4 Period of validity and amendment of adopted pursuant to Articles 1 and 2shall apply for a specific period.